- Net sales increases to EUR 452.2 million (+8.8%)
- Adjusted EBITDA improves to EUR 71.2 million (+9.6%)
- Adjusted EBITA reaches EUR 56.1 million (+8.7%)
- Consistent delivery of international growth strategy
Luxembourg, May 12, 2015 – Armacell, a global leader in flexible insulation foams for the equipment insulation market and a leading provider of engineered foams, successfully continued its international growth strategy in 2014. The company increased net sales by 8.8 percent year-on-year to EUR 452.2 million (previous year: EUR 415.7 million) in financial year 2014. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)1 increased by 9.6 percent year-on-year to EUR 71.2 million in 2014 (previous year: EUR 64.9 million). Adjusted earnings before interest, taxes and amortization (EBITA) improved by 8.7 percent to EUR 56.1 million (previous year: EUR 51.7 million). Due to continued efforts to improve cost performance, Armacell maintained an EBITA ratio relative to net sales of 12.4 percent.
Important drivers of this positive development were the ongoing growth in the construction/HVAC business as well as the growing demand for the substitution of existing insulation with high-performance materials from Armacell. The products and solutions are geared optimally towards the customer needs and are continuously further developed based on the leading technologies of Armacell. A number of other growth drivers, such as continuing urbanization, greater energy efficiency and a renewed focus on noise protection, are also driving demand for the company's technical solutions and products.
"2014 was a successful year for Armacell. Our profitable growth in both – our business segments and across all of our regions – underlines the significance of our consistent international growth strategy”, says Patrick Mathieu, CEO of Armacell International S.A..
Two successful business segments2
In 2014, Armacell recorded net sales growth in both of its business segments and across all three regions. In the Advanced Insulation business, net sales were up by 8.9 percent to EUR 355.8 million (previous year: EUR 326.8 million). This division accounted for 79 percent of net sales in financial year 2014. Advanced Insulation encompasses all company activities relating to the development of flexible insulation foam products for the insulation of equipment. Above all, these include markets in which energy distribution is required, such as in commercial and residential construction, industrial applications, or the oil and gas industry.
In the business segment Engineered Foams, net sales increased by 8.9 percent to EUR 94.6 million (previous year: EUR 86.9 million), thus accounting for 21 percent of net sales in 2014. In this division, Armacell develops light foams for the use in a wide range of end-markets in which both product weight and robustness are essential, such as the automotive and wind energy industry.
Armacell continuously invests in the development of safe and innovative thermal and acoustic insulations. The group operates four research and development centres – in Muenster (Germany), Mebane (USA), Thimister-Clermont (Belgium) and Guangzhou (China).
Consistent internationalization
A core component of the international growth strategy is the presence in and build out of emerging markets, which Armacell was able to further reinforce in the reporting period. In June 2014, Armacell purchased the remaining shares in Armacell Zamil Middle East Company (AZMEC) based in Dammam, Saudi Arabia, from its previous joint venture partner Zamil Industrial Investment Co3. This increased the opportunities for Armacell in the entire Gulf region, which offers significant business potential to the insulation industry due to e.g. the ongoing construction boom. Armacell products were specified and installed in a number of the region's major construction projects, such as the “Burj al Arab” and the Atlantis Hotel. AZMEC has since been fully consolidated and is contributing to the positive growth trend in the EMEA region (Europe, Middle East and Africa) in the Advanced Insulation business. Another important step was the purchase of Armatech Co. Ltd. in Korea, the long- time distribution partner and leading provider of engineered foams for the heating, sanitation and air conditioning industry. This follows the successful establishment of a wholly-owned manufacturing site in Cheonan, South Korea, in 2012 and drives the expansion in the APAC India region (Asia-Pacific and India) forward.
Armacell consistently pursued its international growth strategy in the first quarter of 2015. With the acquisition of the Turkish insulation materials manufacturer Das Yalıtım Sanayi ve Ticaret Anonim Şirketi (OneFlex), Armacell has significantly strengthened its market position in Turkey and expands its geographic footprint to other countries across the regions of Middle East, Africa and Southeastern Europe. The acquisition of the business of Industrial Thermo Polymers Limited (ITP) in Canada, combined with existing operations in US, will position Armacell as a leading manufacturer of polyethylene insulation foam on the North American continent.
Today, Armacell operates 22 manufacturing plants in 15 countries on four continents. In recent years, the company has expanded its presence to new markets with production sites in China, Thailand, India, Brazil, Saudi Arabia, South Korea and, since 2015, Turkey and Canada.
In 2015, Armacell will continue to focus on expanding its strong market position, globally marketing its pioneering technologies and delivering on its international growth strategy.
1 Earnings before interest, taxes, depreciation and amortization (EBITDA) was adjusted by excluding non-recurrent items.
2 In addition to the two business segments “Advanced Insulation” and “Engineered Foams”, other net sales of EUR 1.9 million (previous year: EUR 2 million) were achieved through rendering of services in the temporary employment sector.
3 The closing of this transaction is expected to occur in the second half of 2015.